Steel Frame Homes Project Management: An Analysis of Cost Overruns and Essential Project Principles

I read this article about the steel frame homes project and became very disheartened. My initial response is one word; “Wow”! Forgive me for being blunt, but to almost double the cost of this project in this manner is astonishingly bad management. Some years ago, I spent some time in construction project management as a client-side project manager building schools. Certified to PRINCE2 Practitioner standard, I learnt that there is usually a project board – the owner/controller of the project, if you will. Then you may have a project director and certainly a project manager.

These two actors are in close communication with each other and the project board, along with stakeholders from the supply side. I have found there can be one single point of failure in any construction project: a project director who does not understand the requirements of a project. It ought to be well understood by anybody operating in the built environment that any project should go through the basic steps, summarised as planning & development, design, preconstruction, procurement and construction. The project must be fully costed on a stage-by-stage basis, based on properly conceived objectives and well-designed project plans which achieve those objectives. In that planning stage, due diligence is carried out, risks are considered and weighed, timelines are set. Before execution, you know your costs and include an amount for contingencies (risk management).

Once that process is underway, the project will reach a level of cost certainty. Then you arrive at a go/no-go decision point. In essence, you have to get the basics right before you commit. Why do you do this? To avoid costly mistakes! No project should be executed until these basic steps have been completed. That’s the Ministry of Housing’s job, as the project owner. When the project is underway, regular project board meetings should be convened to ensure that all the project risks (the known unknowns, so to speak) have been understood and managed and the project timeline is still valid and on budget. If I have understood this article correctly, in summary, [Minister of Housing Dwight] Sutherland fully admits what in project management terms are costly mistakes; i.e. (notwithstanding this country’s partnership with China) not properly planning for labour acquisition, labour costs, labour skills and requirements (quite a significant factor in any construction project, one would think).

Additionally, not contemplating the need for roads and electricity being required because they didn’t talk to their stakeholders and comrades in the NHC, plus not even properly planning where 74 houses were going to be built. And they failed to understand the full legal implications of the project. So, I can’t help but direct my remarks to the minister. Three years into a four-month project and the displaced persons are still displaced. I suggest that is because execution was done on a wing and a prayer. Prayer can be good but hope is not a strategy. Notwithstanding that, Mr Sutherland’s astounding admission is, he is “not disappointed”, and quite remarkably feels able to justify that to the nation. That a self-imposed tribute is uttered in the same breath as justifying the 95 per cent overspend of taxpayers’ money and leaving displaced persons, well, displaced, three years later, is very disheartening (to put it very mildly).